Okla. Stat. tit. 12A § 2-509
Okla. Stat. tit. 12A, § 2-509
Oklahoma Code Comment
This section governs the placement of the risk of loss when both buyer and seller have fully performed their agreement. Although the words "in absence of breach" appear only in the caption, and not within the body, they are a part of the Act by virtue of Section 1-109 . The effect of breach upon risk of loss, such as the shipment of nonconforming goods, or wrongful rejection by the buyer is treated elsewhere.
Pursuant to the policy of the Commercial Code to repudiate the "title" approach to the law of sales, this section affixes the risk of loss without reference to who may have title. However, the change is primarily in approach, for the risk is placed upon the party who would have had title under present rules, with the exception of the rule stated in paragraph (3).
(1) This is consistent with the results reached under previous Oklahoma decisions. See the authorities cited under Section 2-319 , "F.O.B. and F.A.S. Terms."
(2) There are no previous Oklahoma decisions.
(3) This changes previous Oklahoma law. Previously in Oklahoma title, and therefore risk of loss, to specific goods in a deliverable state passed when the contract was made, even though the payment of the purchase price and delivery was postponed. Pharaoh v. Burnett & Moore, 112 Okl. 188, 240 P. 743. Under this paragraph, risk of loss will not pass until actual receipt of the goods [which, by definition means physical possession, Sec. 2-103 ] if the seller is a merchant; otherwise upon tender of delivery.
Note that under Section 2-401 "title" to goods passes upon the making of the contract, and under Section 2-501 , an insurable interest is obtained at the time the contract is made. However, the application of Section 2-401 is limited to cases not otherwise provided for, and Section 2-501 is designed only to convey an insurable interest. Therefore, risk of loss is determined solely by this section.
In cases in which the seller is clearly a merchant, dealing in goods of the kind sold [see definition, Section 2-104 ] application of this section is relatively simple. There is but one question: were the goods received? However, questions can arise as to who are "merchants." The act defines a merchant as one who deals in goods of that kind. Therefore, a grocer is a merchant of groceries, but if he undertakes to sell a surplus truck, he is not a merchant of the truck. Is a farmer a merchant? If he raises crops for sale, as distinguished from personal consumption, it seems rather clear that he is a merchant, for he deals with goods of that kind.
In cases of non-merchants the passage of the risk of loss may become complex. Risk passes upon "tender of delivery." Tender, by Section 2-503(1) "requires that the seller put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery." Suppose a cattleman raises his own feed and does not usually sell to others, and is therefore not a "merchant." He consents, however, to sell some to a neighbor as an accommodation. They agree as to a particular stack of feed, and the buyer is to pick it up in his own vehicles at his own convenience. A few days after the contract is made, but before the buyer has removed it, the feed is destroyed by fire. Who has the risk of loss? Under previous Oklahoma law, title has passed, and the buyer therefore has the risk. But under the Commercial Code, it must be decided whether or not there is a proper tender. Clearly the seller has put conforming goods at the buyer's disposition, and the buyer has notice, and therefore it appears that the risk of loss has passed. With this interpretation, the Commercial Code does not in fact change the results of previous law in reference to the non-merchant seller, for the very act of identifying the property is a tender of delivery. This, of course, assumes that the buyer has the duty to remove the goods, for if the seller undertook to deliver, tender would not be effective until the goods reach their destination [ Section 2-503(3) ].
(4) Previous Oklahoma law is in accord. Oklahoma Producing & Refining Corporation v. Pennok Oil Co., 118 Okl. 170, 247 P. 667 (1926); Pabst Brewing Co. v. Smith, 39 Okl. 403, 135 P. 381 (1913).